Mid-Day ETF Update: ETFs, Stocks Continue To Make Gains on Budget Talks Optimism, Home-Builder Confidence Data

Active broad-market exchange-traded funds at mid-day:

SPDR S&P 500 ( SPY ): +0.9%

Financial Select Sector SPDR ( XLF ): +1.1%, hit new year highs

iShares MSCI Emerging Markets Index ( EEM ): -0.1%

PowerShares QQQ Trust, Series 1 ( QQQ ): +1.4%

iShares Russell 2000 Index ( IWM ): +1%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, continue to perk up, with financial ETFs touching new year highs. Actively traded PowerShares QQQ ( QQQ ) is up 1.4%.

U.S. stocks continue to log gains with investors increasing optimistic that a compromise can be reached in the U.S. budget talks, thus preventing a so-called 'fiscal cliff'. Stocks got a further lift from the report that home-builder confidence has reached its highest level since April 2006. Earlier, shares had trimmed gains following statements from Senator Bob Corker, who said that President Barack Obama's to return to Bush-era tax rates for households earning more than $400,000 was far from final. In other U.S. economic data, the U.S. third quarter current account gap decreased to $107.5 billion - the lowest level since the fourth quarter in 2012.

Winners and Losers

Financial -

Select Financial Sector SPDRs ( XLF ) is up 1.3% and has posted a new year high of $16.55. Direxion Daily Financial Bull 3X shares (FAS) is up 3.2%, also touching a new year high. Its bearish counterpart, FAZ, is down more than 3%, sinking to a new year low of $15.10.

Among financial actives, Bank of America Corp. (BAC) is up 2% to new 52-week higha after it was upgraded to a Buy from a Hold at Meredith Whitney Advisory Group. The price target on the stock is set at $11 a share.

Technology -

Tech ETFs are firmer: Technology Select Sector SPDR ETF (XLK), up 1.5%; iShares Dow Jones US Technology ETF (IYW), up 1.9%; iShares S&P North American Technology ETF (IGM), up 1.6%; and iShares S&P North American Technology-Software Index (IGV), up 1.1%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) is up 2% and Semiconductor Sector Index Fund (SOXX) is up 1.8%. SPDR S&P International Technology Sector ETF (IPK) is up 0.34%.

In sector news, Apple (AAPL) is up 2.5%. Earlier, reports said Samsung is dropping its patent suits against Apple in Europe.

Energy -

Dow Jones U.S. Energy Fund (IYE) is up 1.75%; Energy Select Sector SPDR (XLE) is up 1.8%.

In sector news, Baker Hughes (BHI) is up more than 4% after the company said it expects North America revenue and profit margins to be lower than previous guidance due to weaker than anticipated onshore activity and further price erosion within Pressure Pumping operations. It now sees North America operating profit before tax margin to be between 8.5% and 9.5% for Q4, as compared to 11.7% in Q3 of 2012. The company also expects international operating profit before tax margin to be similar to the 12% reported in Q3 of 2012, excluding the impact of bad debts recognized in Latin America and Europe.

Commodities -

Crude was up 0.85%; natural gas was up 1%. United States Oil Fund (USO) is up 0.6%. United States Natural Gas Fund (UNG) is up 1.6%.

Gold was down 1.37% and silver was down 1.79%. Among rare metal funds, SPDR Gold Trust (GLD) is down 1.2%; iShares Silver Trust (SLV) is down 1.4%.

Consumer -

Consumer ETFs are near 52 week highs: Consumer Staples Select Sector SPDR (XLP), up 0.17%; iShares Dow Jones US Consumer Goods (IYK), up 0.16%; and Vanguard Consumer Staples ETF (VDC) down 0.14%, but still only around $1 off year highs.

In sector news, Coca-Cola Enterprises (CCE) is up 3.25%, leaving it just shy of year highs, after revising its outlook. It is now expecting FY12 EPS at the high end of its previously disclosed range of $2.20 - $2.24, versus the Capital IQ consensus estimate of $2.23. Net sales and operating income are expected to grow in a low to mid-single-digit range. It also anticipates FY13 comparable and currency neutral EPS to grow about 10%. Net sales and operating income are expected to grow in a mid-single-digit range. CCE intends to increase its 2013 dividend payout to a range of 30% to 35% of 2013 comparable and currency neutral earnings per share.

Power Play -

Healthcare -

Healthcare ETFs are firmer too: Health Care SPDR (XLV), up 0.8%; Vanguard Health Care ETF (VHT), up 1%; and iShares Dow Jones US Healthcare (IYH), up 0.9%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is up 1%.

In corporate news, Vanda Pharmaceuticals (VNDA) is now up 20% at around $3.88 but off a day high $4.42 after it reported positive results from its Phase III study of tasimeleon, a circadian regulator for the treatment of Non-24-Hour Disorder, a rare circadian rhythm disorder that affects a majority of totally blind individuals who lack light perception and cannot entrain or reset their master body clock to the 24-hour day. The company said that tasimelteon achieved the primary endpoint of entrainment of the melatonin rhythm as compared to placebo.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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